Amending the Climate Change Response Act
The Government has introduced an amendment bill to make a range of changes to New Zealand’s key climate change law.
The Government has introduced a Bill to make changes to New Zealand’s climate change law.
The amendments are designed to support efficient and effective operation of the Climate Change Response Act 2002 (CCRA) and the New Zealand Emissions Trading Scheme (ETS).
The Climate Change Response Amendment Bill includes updates to:
- ensure councils prepare climate adaptation plans for priority areas
- support the operation of the ETS
- amend complex or duplicative requirements in the CCRA.
These changes were largely announced by the Government in November 2025. A list of key updates since initial announcements can be found at the bottom of this page.
Read the Climate Change Response Amendment Bill (Legislation website)
Read about the Bill on the Parliament website
See the Consistency Accountability Statement (MCERT website)
The Bill was introduced to Parliament on 15 July 2026. It is expected that the Bill will be referred to Select Committee. Once the Committee calls for public submissions, information about how to make a submission will be made publicly available through Parliament.
The amendment Bill proposes changes to ensure councils are managing risks related to natural hazards by requiring territorial authorities (councils) to plan for how to adapt to climate related natural hazards in the highest-priority areas.
Adaptation plans will lay out the steps for implementing actions, and cover how different actions will be funded over time.
Adaptation plans will work with the new planning system. Councils will identify priority locations for adaptation planning as part of developing their first spatial plan, subject to the Planning Act being passed.
Regulations will also be developed to set out the process councils must use when undertaking adaptation planning, including ensuring a full range of options are considered for an at-risk area.
This amendment is a key action in the Government's National Adaptation Framework, which helps manage the growing risks we face from climate change in a way that minimises the overall long-term cost to society.
See Climate change adaptation planning information sheet (MCERT website)
The ETS is a key tool to reduce New Zealand’s emissions. The amendment Bill proposes updates as part of the Government’s work to support a stable and predictable regulatory environment, and promote market confidence and stability.
In December 2025, a separate amendment bill passed to remove the provision within the Climate Change Response Act that states that ETS Settings decisions must “accord with” our international climate change targets (known as Nationally Determined Contributions), along with amending New Zealand’s 2050 methane target.
Market governance of the ETS secondary market
The Bill proposes changes to support market governance for the trading of New Zealand Units in the ETS secondary market.
These proposed changes:
- support market transparency and the availability of market information to government,
- enable market monitoring
- provide two discrete market conduct standards,
- establish the Financial Markets Authority (FMA) as the agency that will enforce the market conduct standards
- establish penalties for breaches of new market governance requirements.
See Market governance for the New Zealand Emissions Trading Scheme
Enabling carbon removals and new emissions sources in the ETS
Forestry is already a critical part of New Zealand’s approach to removing greenhouse gases from the atmosphere, however the Government also wants to ensure businesses and organisations can explore other ways to reduce the impact of their emissions.
The Government has been exploring opportunities to help recognise and reward non-forestry removals in carbon markets. The amendment Bill proposes to add “carbon removal activities” as an activity that can be recognised under the ETS.
The amendment Bill also provides a way for new emissions sources (not including agriculture), to be added to the ETS in the future, by enabling the Minister of Climate Change to amend the CCRA’s schedule 3 by Order in Council.
These changes don't mean new carbon removal activities or emissions sources would immediately be included in the ETS, if the Bill is passed. They will set up the CCRA to enable this in the future, by simplifying the process and making it faster.
Supporting the functioning of the ETS
Biennial Settings
The Bill proposes to move ETS settings to a biennial process, replacing the current annual process. This means that ETS Settings decisions would be made every two years after the Bill passes.
The 2026 ETS Settings process is proceeding as usual, as the change will not come into effect until the Bill has been passed into law.
The 2027 ETS Settings process will also proceed as usual. This provides clarity for the market and enables participants to plan ahead while the amendment bill is going through Parliament.
Industrial allocation
The Government provides allocations of emission units to industry for activities that are both emission-intensive and trade-exposed. This is called industrial allocation. It recognises that ETS costs might affect the competitiveness of some businesses.
Removing allocative baseline reviews and eligibility reviews
Two components of the current industrial allocation settings – allocative baseline reviews and eligibility reviews – are complex and risk disincentivising firms from decarbonising. Currently, these two processes mean it is possible for an allocation to be reviewed and reduced after investments are made, which then impacts the financial viability of making that investment.
The amendment Bill removes these two reviews, except for a limited number of technical exceptions. In particular, annual updates to allocative baselines relating to electricity costs will continue, and any reviews in process will be completed.
The ability for a phase-out rate review will be retained. These will become the primary tool for managing volume of industrial allocation going forward. Phase-out reviews provide the right level of flexibility to balance the cost of industrial allocation with the related environmental, social and economic effects of New Zealand companies moving overseas.
The amendment Bill also proposes two minor changes to the phase out rate review provisions:
- making the timing more flexible, so that a review can take place once in any 5-year period (rather than linked to an emissions budget period); and
- adding a firm’s decarbonisation investments (reductions in emissions intensity or gross emissions) to the list of factors the Minister must consider as part of reviewing phase out rates.
Electricity contracts and related changes to allocations
The amendment Bill clarifies the Minister’s use of their powers relating to electricity contracts and the potential to unexpectedly change allocations based on this.
The changes include:
- a new requirement for the Minister to publish guidance on how the power will be exercised
- a new ability for organisations to seek an early, binding decision on how their draft electricity contracts would affect their allocations once they come into force.
See Overview of industrial allocation
Other changes to the operation of the ETS
The amendment Bill also proposes the following changes to the ETS:
- Including the import of carbon dioxide in the ETS. This will ensure international producers of liquid carbon dioxide face the same costs as domestic producers, helping to support the goal of the ETS to reduce greenhouse gas emissions.
- Allowing flexibility to re-establish forests after significant disruptions, such as a severe weather event. This will help foresters avoid deforestation liabilities when clearance occurs due to events beyond their control.
- Making minor adjustments to the compliance regime, including to extend deadlines after major disruptions, amend the penalty for emissions returns that should have been zero, and allow for discretion to waive a penalty in some circumstances.
The amendment Bill includes changes stemming from a review of the Climate Change Response Act in 2025. The review looked at how to make the act more efficient to implement, streamlining processes to ensure the Government can focus more effort on delivering its climate change priorities.
The amendment Bill proposes efficiency and effectiveness changes across three key areas of the Act:
- Requirements for emissions reduction plans (ERPs) and national adaptation plans (NAPs).
- Timing and sequencing of reports, advice, decisions and responses.
- Consultation requirements.
The amendment Bill also includes other technical changes to ensure the Act is operating efficiently.
The Bill does not change the core elements of the CCRA. The Government is still required to meet New Zealand’s domestic climate targets, with checks and balances for climate policy including the independent advice and monitoring of progress from the Climate Change Commission.
Changes to requirements for ERPs and NAPs
Changes proposed in the amendment Bill will mean:
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The Climate Change Commission will no longer be required to provide advice on policy direction ahead of an emissions reduction plan being developed by the Government.
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The content that must be included in emissions reduction plan is simplified to only include:
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policies and strategies for meeting the relevant emissions budget,
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a strategy to mitigate the impact on iwi and Māori, and
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other policies and strategies that the Minister decides are necessary.
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- The process for updating emissions reduction plans will be clarified by allowing supporting policies and strategies to be changed with fewer prescriptive consultation requirements.
- The process for amending national adaptation plans will be clarified, so a national adaptation plan can be amended at any time.
The Commission will continue to provide policy advice on the climate system through its five-yearly emissions budget advice and its annual Emissions Reduction Monitoring report. The Act also enables the Minister of Climate Change to request advice from the Commission on a range of issues, including to inform future ERPs if needed.
Changes to timing and sequencing of reports, advice, decisions and responses
The CCRA sets out a series of reports, advice, decisions and responses that must be provided by both the Climate Change Commission and the Government at certain times to support climate policy.
The amendment Bill includes updates to the timing and sequence of advice and decisions, to avoid potential duplication.
Updates to timing and sequencing
| Product or decision | Current timing | Updated timing |
|---|---|---|
| Climate Change Commission advice on emissions budgets | Next due in 2029 |
Next due in 2027. Subsequently, in the third year of each emissions budget period. |
| Emissions budget decisions | Next due in 2030 |
Next due in 2029. Subsequently, in the fourth year of each emissions budget period. |
|
Emissions reduction plans |
Next due in 2029. |
Next due in 2030. Subsequently in the fifth year of each emissions budget period. |
| Climate Change Commission advice on 2050 target | Next due in 2029. |
Next due in 2031. Subsequently, provided in the first year of each emissions budget period. |
| 2050 target decisions | Next due in 2030. |
Next due in 2032. Subsequently, in the second year of each emissions budget period. |
| Climate Change Commission annual emissions monitoring report | July | April |
| Government response to Climate Change Commission’s annual emissions monitoring report | Three months after receiving Climate Change Commission’s report | Any stage during the calendar year |
| Government response to the Climate Change Commission’s end of emissions budget report | Three months after receiving Climate Change Commission’s report | Six months after receiving Climate Change Commission’s report |
| National Adaptation Plan progress reports | Every two years | One report, two years after National Adaptation Plans are published |
The Commission's annual emissions monitoring report
The amendment Bill brings forward the timing of the Commission’s annual emissions monitoring report to April, in the same month as the Commission’s ETS Settings advice.
Aligning the timing of annual emissions monitoring and the ETS Setting advice, in years when decisions are due, will enable both pieces of advice to use the same emissions projections and be considered as one coherent package.
The timeline of the required Government response to these pieces of advice is also being adjusted to enable the Government to respond to these together.
Consultation requirements
The amendment Bill proposes changes to consultation requirements to remove duplicative processes, and ensure consultation by the Commission and the Government is pitched at the right level. Under these changes, the Commission’s advice is informed by experts, in line with its role in providing expert advice, and the Government’s decisions are informed by a range of factors including public opinion.
The key changes to consultation requirements in the amendment Bill are:
- No longer requiring the Commission to publicly consult when developing advice on emissions budgets. This is in line with other advice, which does not require consultation. The Commission will still be required to engage with experts and can still carry out public consultation if it considers it necessary.
- Removing the complex consultation requirements that must be followed when a Minister sets an emissions budget. The Minister will not be required to consult with the public but can still do so if they consider it necessary. This change reflects these are technical decisions, and are likely better addressed by expert advice from the Commission.
- As the Government is no longer requiring the Commission to provide advice before developing emissions reduction plans, the Commission will no longer need to engage with the public on that advice. The public will still have the opportunity to provide feedback on proposed emissions reduction plans through Government consultation.
- No longer requiring the Government to consult on amendments to emissions reduction plans. This recognises that amendments often reflect the impact of changes to specific policies, with consultation often occurring as part of the process of changing those policies. Before amending an ERP to reflect policy changes, the Minister must still consider the impact of the changes on emissions and iwi and Māori.
A full list of changes is included in Appendix 1 (page 19) of the proactively released cabinet paper. This outlines the situation, the issue that each change is intended to address, and the proposed change.
See Policy decisions for a Climate Change Response Amendment Bill cabinet paper.
The Government announced the amendment Bill changes in November 2025.
See Government announces a series of changes to NZ’s climate change law | Ministry for the Environment
Updates made since November 2025 include:
- Adding a way for new emissions sources (not including agriculture) to be added to the ETS in the future by enabling the Minister of Climate Change to amend the CCRA’s Schedule 3 by Order in Council. The Bill requires the Minister to consult before any changes are made.
- Moving the review of New Zealand’s 2050 climate target to 2040 instead of 2041, so it aligns with the review of the biogenic methane target.
- Removing the requirement for Amendments to Emissions Reduction Plans to be presented to the House, as summaries are already provided annually.
- Minor updates to how territorial authorities will undertake adaptation planning in practice.
- Minor updates to the administration of forestry, including how deforestation tests apply when standing trees are cleared by an event outside a forester’s control.